Public sector consultancy Impower - which works with several children's services departments in England - says councils can take straightforward steps to boost the number of foster carers they recruit "in-house", rather than paying for more costly arrangements through independent fostering agencies.
However independent providers have questioned the findings.
The report, Fostering Futures, claims that council-provided foster placements are, on average, £17,000 a year less expensive than agency placements.
It says local authority placements are an average of nine miles from a looked-after child's home address, rather than 17 miles for agency placements, meaning they face less likelihood of disruption as a result of being removed from their school and friends.
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